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Month: October 2014

Nudging (or as some seem to have dubbed it ‘Nudge Theory’) is booming and inevitably there are critics. We can hardly deny that there are downsides to some aspects of nudges, and that they are not appropriate in all situations or cases. Acknowledged, for certain. The point in such cases is not to discard nudging, but to find the situations in which it can and in what way it can be helpful.

In other words, we encourage people to adopt a critical stance to the initial phase of using nudges, anywhere, anytime, anyhow. Test and see if it works before diving head-first into the dark. Most critique that points towards this direction is very useful and completely valid but…

With this blog post, I intend to give a (very) brief taste for newbies to the field of behavioural economics. And by that – lets start by talking about some standard economic theory and a rarity of man called Homo Economicus. Homo economicus is a very rational man who carefully weighs cost and benefits and is well-informed by his existing preferences – that is, he computes the values of all the options he faces, and then follows the best possible path of choice. We can also call him superman – hrmhrm, minus the fact that he only maximizes utility in his choices with regard to his own self-interest. This self-interested Superman (nope, he doesn’t sound very charming at all) is what standard economic theory assumes we are as humans. Subsequently, it is also what standard policy tools (e.g. taxes, subsidies, bans & regulations) that target human behaviour are based on.

However, we all now that we as humans are not always rational in our choices. A substantial body of research proves that we are very much influenced by limited cognitive resources, incomplete information and heuristics that lead to systematic deviations from our “rational” choice. Heuristics are mental shortcuts that humans rely on which though to simplify judgemental operations. These heuristics are in general quite useful (it helps you to not being forced actively reflect on every little single bit action you do), but also quite often they lead to severe cognitive biases. Biases that reasons in a way, which is not in accordance with norms of logic and probability. Let’s give you one of the behaviour economics guru Daniel Kahnemans’s favourite examples of how a cognitive bias can occur (although I Swedishonized the version a bit):

An individual in Sweden has been described by a neighbour as follows: Veronika is a very shy and withdrawn person but always helpful to people. She has a passion for reading books and is a very tidy soul with a detail for order and structure. Is Veronika more likely to be a librarian or a doctor?

Now, most people’s first intuitive thought or image that pops up into their mind is that Veronika is a librarian. Surely, this is because Veronika resembles a librarian more than a doctor. But, what “rational” people first should think of is that there are almost ten times more doctors than librarians in Sweden – hence Veronika is more likely to be a doctor. This example is just one out of MANY that proves that we deviates from Mr. Rational Superman.

In fact, we are far more complex than just being rational and therefore behavioural economists rather call us humans HomER economicus. For example, we tend to postpone things that we rather would like to be done with, have unhealthy living habits where we smoke, eat too much and exercise to little and – we consume beyond the planet’s capacity to recover. Therefore, in the area of public policy-making and tools that are based on biased assumptions – the intended effect may lead to failures. Behaviour economics, and in particular nudging, which recently has become a field within applied behavioural economics, is all about understanding these failures in order to change human behaviour.

Applied behavioural economics acknowledge the importance of having an interdisciplinary evidence-based approach using economic with insights from psychology. It emphasizes the role of analyze and test (often via experiments) in order to reveal if the policy intervention actually reached an intended effect on human behaviour. In conclusion, the purpose with this blog – as Britt mentioned in her previous post is NOT to say that “nudging” is the solution of all problems – but to spur an open debate about use of it as a tool with the aim of increasing “good” behaviour in Sweden. Nevertheless, not all nudges are good nudges – nudging is a powerful tool and can be harmful if being used in the wrong hands. But a debate about the ethics of nudging requires much more space than what I will dedicate this post – we’ll save that discussion for an upcoming one!

For those of you how had no clue what behavioural economics is about – hopefully this post gave you a teaser about it and why we should look at policy through a evidence-based behavioural lens.

Over and out!

On the behalf of the Swedish nudging team,

Linda

Ps.. Oh, and to be clear – I only shared a glance from my own head in this post. For a more comprehensive understanding I suggest you to dig deeper in to the literature. We will soon provide a reading – and watching list for those who are interested in knowing more!

People in Sweden are quite responsible in general, with 93% of Swedish respondents in a Eurobarometer poll stating that recycling of waste is pivotal for the environment. Although convinced of this, only 69% of Swedes claim to regularly recycle their trash. Now this is a half-full/half-empty glass issue, and I am not saying that 69% is too little. In fact, I am proud of Swedes that they score so high in this. The European average is only 59%, and only a few countries top Sweden in recycling: Luxembourg (83%), France (82%), Belgium (78%), the UK (74%), Austria (71%) and Ireland (70%). But nevertheless, 69% means that at least 31% of us can do more! That is a happy message, if you ask me, there is room for improvement. All we really need to do, is improve!

Coming back to the topic of this post: Uppsala’s Bottle Bins. Uppsala saw a brilliant opportunity in adding some bottle-collecting cylinders to their normal trash bins; it provides poor people with an excellent way to collect waste and thus both earn money and help society keep clean at the same time. As you can see on the photo below, pedestrians can dispose their pant bottles (and pant is high in Sweden, about 1 kr per small container, or 10 Euro-cents). People who can use some extra money can simply take out the bottles if they see them in there, without the need to dig through a deep trash bin (and sometimes leaving a messy sight).

This is a nudge that changes something in the physical environment of the person who engages in behaviour. In fact, it does so on two occasions. Firstly it suggests people that it is better to drop their flasks and bottles in the recycle cilinder, rather than tossing them in the common trash bin. Secondly, it allows people who are looking for these bottles as a way of income to collect them without having to go head-first into dirty trash bins!

If you want to check out these bins, by the way, they are still around at the Uppsala train station. If you’re around, go ahead and donate a bottle or two.

Welcome to the new blog site of the Swedish Nudging Network. We are happy to see you found us. Are you familiar with nudging? Nudging, is it the solution to all our problems or the greatest joke in behavioural science since Milgram* and colleagues got people to stare into the distance, for no apparent reason other than that others seemed to be doing it? It is easy to be excited about it, but nudging people is not a panacea for all the world’s problems. It will not solve wars nor will it feed the poor, but what it can do, is help people in good behaviour in their everyday lives. That is great, right? But what is it, then, to nudge? The term nudging as it was invented by Richard Thaler and Cass Sunstein is all about making small changes in a person’s choice environment (we often like to call it choice architecture). This choice environment can be physical (the place you are standing at, the items around you, the view in a distance) as mental (the memories of good old days, your identity, or knowledge about something) and social (who is watching, what would they think, do you care?). All these things affect behaviour, and they do so, always. There is no choice nor behaviour that does not have an choice architecture (just as there is no building that has no ‘real’ architecture). Here is where nudging comes into play. Nudging is trying to facilitate better behaviour (for health, society and the environment) by changing the choice architecture. Pivotal (and we cannot emphasize this enough) is that the options remain open. If a so-called choice architect decides to remove A and B from an ABC choice, then he is not nudging, he is coercing. Nudging would be to make it more likely for any individual to choose one over the others, but always without infringing on a person’s own freedom to choose.

Here ends the first lesson on nudges. We hope that the reader will scroll down and enjoy the many posts that we will put on here. They are all related to nudging, and will hopefully enlighten and inspire both the expert and the lay-person. Enjoy and never hesitate to give your feedback! Kind regards on behalf of the nudging team of Sweden Britt

* Milgram and colleagues, they did an experiment to see what people would do if they see others behave in certain ways. They posted an individual on a streetcorner and had him stare at the sky. Little happened. They then had five people stare at the sky, same point, same time of the day. What happened? All of the sudden, a lot of pedestrians started staring at the sky as well! Social proof. Useful for something? Feel free to let us know how you would use this. Help us inspire